May 26th, 2010 @ BAFTA, London
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ME executive editor Tim Green on how new UK mobile content regulations could impact the market
Long after the UK premium mobile content subscriptions business shrunk to the size of a walnut, regulator PhonepayPlus (PPP) is getting tough.
Yesterday morning the watchdog announced new regulations – a full six months after the last lot.
This week’s measures came in response to a shocking 8,000 mobile-related complaints in 2007/8 – a 108 per cent increase on the previous year.
The first main change is ‘prior permission’. Here, content subscription providers charging over £4.50 a week must first apply for permission from PhonepayPlus to offer their services. The second is ‘active confirmation’, which dictates that any prospective subscriber must first receive a free confirmation text message detailing the Ts & Cs, giving them a chance to opt out.
Now, no right-minded observer could argue with these measures. But the point is not whether they are well-intentioned, but whether they will work. PPP has made it clear that its target is the ‘small number’ of rip-off merchants.
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Will it succeed, or merely increase red-tape for the already beleaguered legitimate providers? The MEF is not convinced, saying the new rules appear to ‘collectively punish’ the majority.
I’ve chatted to a few aggregators this week too, and there’s clearly some unrest out there. Here’s what I’ve gleaned. First, why are those complaints up? Is the problem getting worse or it possible that, because mobile operators are now passing queries direct to PPP, the watchdog simply gets a higher share?
Second, is PPP filing all questions as complaints? Third, are the 8,000 complaints about two providers or 100? There’s a big difference in the response required to each.
Fourth, how can the new rules combat deliberately dodgy sellers? If someone wants to rip the public off, they can just ignore the new rules, make a quick killing and scarper back to Monaco where their company is registered before any action is taken.
I don’t wish to underestimate the harm caused by mis-sold content subscriptions. Until recently my wife was getting expensive texts from lascivious young ladies that she assures me she didn’t know.
Reluctantly, I believed her, and told her to text ‘STOP’. It worked, but it made me wonder whether the business could do a better job of publicising the ‘STOP’ command than introducing more punitive legislation.
A few months’ back the CEO of Zed told me that, thanks to PPP’s inaction in the early days, the UK market was destroyed and that it now generates less for his company than Bangladesh.
Now, just at the point in the market’s evolution where brands like Sky are starting to offer classy services that deliver real value, the watchdog appears to have swung from doing nothing to hammering out regulation every few weeks. Let's hope it works, and the Brits can overtake the Bangladeshis.
Great article! This whole industry is due for a shake up, paying for content is so 2007 -2008. the whole market is moving to a free, ad-funded models that are easier to operate and offer better value for consumers.
I do not work for a content provider nor aggregator. Call me an interested party! Once again the mobile industry is being crippled thru an excess of legislation that other industries do not suffer. I just listened to an article on the radio about online casual gambling sites taking £1000's from punters and setting their own voluntary code of practice. For years Readers Digest, Which Magazine, gym memberships and many more non-technology related businesses have made their fortunes operating subscription businesses. What's wrong with "Buyer Beware?"
Phonepayplus has already said the major cause of the problem is the industry using third party data lists of phone numbers bought from price comparison sites and other retailers. They have admitted that many of the people being billed have not seen, requested or agreed to pay for any premium rate content/service.
"Buyer Beware" doesn't come into it. The industry had enough warnings they only have themselves to blame.